When selling your company

The buyer of a company is not interested in paying euro for euro; rather, the sales price should be calculated according to the company’s goodwill. Its goodwill is made up of, for example, the company’s customer relationships and the competence of its personnel. Prior to selling the company, you should transfer your company’s surplus assets to your own name and make a sensible plan on how to grow your wealth.

If there is no successor to take over the business, you will receive the best assistance from an expert on how to wind down the business. Risk and pension insurance cover does not need to be terminated when your entrepreneurial activities end; instead, the insurance can be transferred to your name or, e.g., to the new company or employer.

Make sure that you will have a regular, monthly income and a sufficient flow of income also when you retire.

When purchasing a company

Part of a business’s value is always linked to the competence of its employees. Committed key employees know the company and the customers, and they ensure the smooth continuation of the business after it is transferred to a new owner. A good way to keep key employees in the company is by offering the right kind of rewards, such as delayed bonuses or pension insurance that is linked to working time.

As an entrepreneur, you should also cover your own risks, such as debts and other collaterals arising from the purchase of a company, through personal insurance.

If your company has several co-owners, it is a good idea to prepare for personal risks already in the shareholders’ agreement. In such cases, the redemption of shares, for instance, in the case of death or if a partner becomes permanently disabled, shall be agreed on.

Era of a new generation

When a business is transferred to the next generation, the owner of the company usually wants the transfer to take place at less than the full commercial price. Entrepreneurs’ pension under the Self-Employed Persons’ Pensions Act (YEL) will probably not be sufficient to retain your desired standard of living during retirement, so it is important to supplement it.

Group pension insurance helps not only the owner who is transferring his or her business, but also the new entrepreneur to prepare for their retirement. A new entrepreneur’s need to take out a loan will be lower if the entrepreneur who is transferring the business remains in the service of the company and a portion of the company’s result is put towards his or her pension insurance.

Also be sure to keep the following matters in mind if your company will soon be transferring to the next generation:

Entrepreneurs just starting out often have loans and personal assets tied to the business. Unexpected situations, illness or disability can put a serious dent in your and your family’s livelihood. It is wise to safeguard your personal financial risks with personal insurance.

Life insurance or investment insurance can also ease the circumstances of next of kin when it comes to the payment of inheritance tax.

If a company’s assets are transferred as part of an inheritance, it is important to ensure that every heir’s compulsory legal portion is covered, and the livelihood of the entrepreneur’s spouse, if there is one, must be looked after. So, make sure in advance that agreements concerning the family’s legal rights are in order.

Let’s come up with a better plan for your wealth

When you sell your company, be sure to carefully plan what you will do with the proceeds from the sale. What are your hopes and desires for the rest of your life? Do you want to leave something for your next of kin, and is your standard of living during your retirement definitely secure? We will always take into account your situation when devising a plan for managing your wealth.

If, after selling your company, you are left with assets that are not needed to further the business, their management should be arranged in the best possible way. We offer comprehensive services also for managing companies’ wealth.

The information concerning the products or services presented on this website is a general presentation and cannot be construed as an offer or as investment advice or any other advice to make a decision concerning an investment or insurance. The Customer must carefully familiarise him-/herself with the terms and conditions and brochures pertaining to the products and services, and, if necessary, obtain more information prior to making an individual investment decision or other decision concerning insurance. The information regarding legislation and taxation is based on Mandatum Life's understanding of the current legislation and taxation practices. The website contains material that is covered by intellectual property rights. All rights are reserved.
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